German chancellor’s veto of plan by interior minister to control and reduce illegal migration angers conservatives in her coalition

BERLIN—A rebellion over immigration in German Chancellor Angela Merkel’s conservative bloc is threatening the stability of her fragile coalition.

Ms. Merkel’s weekend decision to veto a plan by her interior minister aimed at controlling and reducing illegal migration—and the minister’s refusal to back down—has shattered an uneasy truce between conservative backers and opponents of her liberal asylum policy.